Petco Investor Day Presentation Deck
March 2022, 137 slides
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a investor day | Petco
investor day agenda i a an strategic vision pet health wellness mike miller differentiated merchandise amy college innovation showcase reddy shop vet interactive unleashed wrap up wid tae a categories channels long term financial framework customer analytics marketing a customers financial framework innovation showcase rural lunch innovation showcase kitchen vital care love | Petco
safe harbor and non measures this presentation is or should be relied upon as cautions that the foregoing list of risks uncertainties other factors is not complete forward looking statements speak only as of the date they are made undertakes no duty to update publicly any such forward looking statement whether as a result of new information future events or otherwise except as may be required by applicable law regulation or other competent legal authority this presentation contains forward looking statements within the meaning of the private securities litigation reform act of as contained in section a of the securities act of as amended section of the securities exchange act of as amended concerning expectations beliefs plans objectives goals strategies future events or performance underlying assumptions other statements that are other than statements of historical fact including statements regarding our fiscal year guidance our growth plans execution on our transformation initiatives such opportunity illustrative forward looking statements can generally be identified by the use of forward looking terms such as believes expects may intends will shall should anticipates or the negative thereof or other variations thereon or comparable terminology although believes that the expectations assumptions reflected in these statements are reasonable there can be a no assurance that these expectations will prove to be correct or that any forward looking results will occur or be realized nothing contained in promise or representation or warranty as to any future matter including any matter in respect of the operations or business or financial condition of all forward looking statements are based on expectations assumptions about future events that may or may not be correct or necessarily take place that are by their nature subject to significant uncertainties contingencies many of which are outside the control of forward looking statements are subject to a number of risks uncertainties other factors that could cause actual results or events to differ materially from the potential results or events discussed in the forward looking statements including without limitation those identified in this presentation as well as the following i increased competition including from channel retailers commerce providers reduced consumer demand for our products or services our reliance on key vendors our ability to attract retain qualified employees risks arising from statutory regulatory or legal developments pressures in the markets in which we operate including inflation failure to effectively manage our costs our reliance on our information technology systems our ability to prevent or effectively respond to a privacy or security breach our ability to effectively manage or integrate strategic alliances or acquisitions realize the anticipated benefits of such transactions economic or regulatory developments that might affect our ability to provide attractive promotional ventures catastrophic events political tensions conflicts wars such as the ongoing conflict in the health crises financing business interruptions other supply chain issues pandemics including the potential effects that the ongoing covid pandemic or corresponding uncertainty could have on our financial position results of operations cash flows our ability to maintain positive brand perception recognition product safety quality concerns changes to labor or employment laws or regulations our ability to ratings the other risks uncertainties other effectively manage our real estate portfolio constraints in the capital markets or our vendor credit terms changes in our credit could significantly alter the results set forth in these factors identified under risk factors elsewhere in our securities exchange commission filings the occurrence of any such factors included in this presentation are certain financial that are not calculated in accordance with generally accepted accounting principles that are designed to supplement free cash not substitute financial information presented in accordance with including but not limited to adjusted trailing twelve month adjusted adjusted may include flow the as defined by may not be comparable to similar presented by other companies the presentation of such which items refer to adjustments to exclude non recurring items should not be construed as an inference that future results cash flows or leverage will be unaffected by other nonrecurring of our financial information about the contained in this presentation this presentation also includes forward looking estimates of adjusted adjusted as part reconciling items because guidance we do not reconcile these for future periods to their most comparable due to the uncertainty potential variability of such items cannot be reasonably predicted with the level of precision required we are unable to provide a reconciliation of these without unreasonable effort forward looking estimates of adjusted adjusted are estimated in a manner consistent with the relevant definitions assumptions noted herein | Petco
strategic i i a i a a | Petco
one year since is thriving yat i i tits woof double digit growth delivered enhanced profitability up in highlighting operating leverage added millions of customers to over million driving significant market share capture accelerated top line growth sales up in consecutive quarters of | Petco
is positioned for sustained profitable growth category projected to grow with strong resilience only fully integrated pet ecosystem products services vets membership portfolio shift to services with one of the veterinary hospital increased customers share of wallet owned and exclusive merchandise that can be found other places competitive advantages across fulfillment marketing data and people rapidly scaling platform delivering seamless experience above market revenue margin expansion of | Petco
world class leadership team driving results a a lac chief executive officer amy college chief merchandising officer chief financial officer chief digital innovation officer a fitch target a miller chief veterinarian chief marketing officer deep retail and health wellness growth strategy chief pet care center officer chief legal human resources officer chief administrative officer mike chief operating officer chief strategy officer love president true religion i capital | Petco
no i dos here but maybe some i woofs che new york year of the wedding when marriages between humans slowed because of the pandemic ceremonies uniting two animals only became more popular a by on and cowboy both year old griffons were married at the home of the bride in the she wore an lace bodice with a ruffle of at the waist the groom layered tulle donned a handmade silk cotton tuxedo and top hat in front of a makeshift chapel set up for the occasion a ceremony was led by even an animal and a human is not sam whose griffon a friend of the grinch attended and is couple fig another griffon served as a flower girl later a vestals meal catering in which also caters events for humans as well as a who handled the guest list said that she and intended to throw the most epic dog wedding we were not just going to do a photo shoot she added we wanted to do more than that of the griffons invited attended it just turned out to be way than anticipated said celebrating a union of two animals or four legged of puppy enjoyed guests chow from about nuptials a bar humans as well as and activities including a ball pit cost the owner tara a fitness coach in and cowboy an owner epidemiology data analyst in phoenix split the bill a the two and their canines met at griffon hangout in the dogs soon became and said who started planning the wedding with after the owners and their pets visited each homes | Petco
powerful trends shaping the future of pet health wellness responsibility spend more connected shopping experience personalization simplification social | Petco
attractive category defined by high growth resiliency pet outpacing historical trend positioned to capture market value tam hos a vet care projected tam for pet market source packaged facts march for tam except companion animals internal estimates for companion animal tam me merchandise companion animals services a supplies | Petco
focused on high value health conscious pet parents what they spend per year where they shop spend concentration by group health conscious elt willingness to pay cod lie ace quality independent specialty neve always seeking new brands pes financially constrained no frills solutions to care price driven seeks simplicity shoppers budget total market mass grocery hass ions | Petco
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our strategy to win leverage competitive advantages industry only integrated end to end health and wellness ecosystem retail leverage industry most passionate partners scale services offering led by rapid national vet build out deepen competitive moats through differentiated merchandise use connected data and loyalty drive more share of wallet from more customers deliver shareholder returns through sustainable profitable growth over the long term vital care ers | Petco
ecosystem provides one stop shop experience pet industry only fully integrated health wellness ecosystem end to end integrated experience data driven insights create singular view of pet parent care parents prefer a | Petco
integrated ecosystem driving share of wallet point of share of wallet health care pet parents prefer a one stop experience | Petco
brings retail to life what is best in class brick and mortar and digital experiences stores as micro distribution centers communities integrated and scaled ava impacting local a nonprofit changing lives i | Petco
on the leading edge of retail with retail value creation structural fulfillment advantages robust end to end pet data personalized experiences improved pet lives a nonprofit changing lives loyalty share wallet and growth sustainable profitable growth | Petco
rapid services expansion to capture increasing demand scaling one of the world vet industry leading grooming training targeting incremental tam | Petco
deepening competitive moats with differentiated premium focused merchandise strategy a a a exclusive portfolio winning in fresh premium a ana just a do | Petco
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attract retain the highest value pet parents data driven insights loyalty marketing personalized digital led and platform focused on house customers precision sas wellness vital care to monetize experiences membership programs | Petco
driving long term sustainable profitable growth strategically accelerating the top line high quality margin expansion of vet services maturing vet hospitals delivering premium assortment expanding owned exclusive brands accelerating digital transformation leveraging fulfillment advantages increasing scaling recurring revenue programs drive innovation in footprint insurance margin expansion above market revenue aggressive cost leverage | Petco
emerging from covid millions new active customers digital growth ship store locations nearly revenue partners same day delivery pickup locations mobile vet clinics full service vet hospitals | Petco
purpose driven performance winning culture i improving lives of pets pet parents improving lives of our partners reunited pets pets saved through love lost increased wage rate we are on a mission to improve lives for pets their parents and partners for partners with us since start of the pandemic new hires from populations reduction in cardboard packaging reduction in sustainable products by invested in benefit announced goal of of promotions coveted humane certified premiums | Petco
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pet health services mike miller investor day | Petco
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building the most comprehensive services offering in the industry best engine for recruiting staffing compensating on boarding and retention best class digital capabilities membership drive synergies with our pet care centers drives ecosystem and cross selling driving high customer satisfaction | Petco
veterinary and services market is high growth and fragmented vet services market is independent practitioners pet services market is independent practitioners non medical which includes grooming dog training boarding | Petco
scale with substantial growth grooming positive training total care salons trainers virtual platform mobile clinics full service hospitals organic fueled by vital as to ecosystem full service hospitals of services revenue booked | Petco
rapidly scaling to meet extraordinary demand our journey growth and scale | Petco
extending our lead and presence in vet through strategic execution total care tuck in acquisitions flex platform within the industry accretive to model advantages of practice maturity augments staffing brings mature practice day expanded staffing platform flexible work options at hospitals clinics unified brand generating operating synergies added thrive hospital staff attractive employment flexibility | Petco
pet health services miller on a investor day | Petco
pet parents and vets see we are unique and do pet health better customers love us because our techs really love us access to of medical services added convenience inside technology vital care leading edge medical state of the art equipment integrated comprehensive wellness as great place to work overall average score of our doctors recommend outstanding partner scores vet experience is unmatched competitive compensation equity autonomous medicine flexible hours | Petco
vet leadership creating a performance culture medical team team prior experience mae council sol ann at stockman tea ail lee ohs lea regional medical director pet hospital silva regional medical director alison marsh regional medical director me teat lori teller swan tammy at i | Petco
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vet economics support growth and add incremental value to each enterprise revenue hospital lift all projections are based on year maturity of hospitals total lift includes mid single digit lift in the pet care center store lift | Petco
continuously investing and driving efficiency in vet model attractive hospital economics expected services revenue hospital four wall pea margin | Petco
merch amy college investor day exclusive | Petco
jake | Petco
market opportunity our merch strategy at is driven by three key elements double digit owned brands differentiated exclusive portfolio humanization companion animals supplies tam brand building customer loyalty well total premium assortment exclusivity partnerships acana dig it food fashion aes so edit shaped tam only | Petco
market opportunity and we are well positioned to continue delivering results double digit companion animals supplies tam merchandise covid weeks total source packaged facts internal estimates for tam premium a notes premium reflects only ale als | Petco
deploying customer insights to shape our owned brands portfolio building category leading wholehearted expansion innovating premium fashion premium and human trends source internal data health wellness leader convert from widely distributed everyday essentials so | Petco
creating a scaled category for pets healthy habits hub owned brands differentiated pest supplements remedies grooming supplies slon as well supplements to help your dog thrive facts packaged source | Petco
eliminating artificial ingredients driving customer loyalty differentiated exclusive fulfills pledge to ban the retailer says first and only major retailer of pet food to not sell food and treats with key brand partnerships taste of me written by a bong throws out and further commits to degree holistic pet care programs nutrition perk spa club visits away from a nutrition perk | Petco
supplies and companion animal offer unique opportunities to further drive profitability and differentiation differentiated exclusive senior highly fragmented tam year stack notes tam is projected based on packaged facts with minor adjustments from additional sources source internal analysis packaged facts year i pops me | Petco
the health wellness | Petco
continuing to drive leadership and accelerated share growth with an expanding portfolio humanization fresh frozen spend note market data excludes source internal data internal analysis using earnest data customer rant market | Petco
reddy creating the first nationally scaled pet fashion and brand humanization source numerator panel shopper data buyers total shoppers updated indexed to total shoppers internal analysis of shoppers are versus rest of supplies high income earners notes high income earners refer to over those earning over insights | Petco
continuing to deliver results with significant headroom for growth fresh owned brands diet cat market opportunity strategy focus areas companion animals tam differentiated exclusive portfolio notes tam is projected market nee dit premium market total market source packaged facts internal estimates tam a it | Petco
digital investor day innovation | Petco
gained the most market share out of any pet retailer gain gain pence ree if a panel | Petco
we launched category leader delivering best in class capabilities pick up nationwide buy now pay later payment integration buy pick up in store service appointments my pet screen personalization competitive pricing engine pet care reminders same day delivery ship from store stages expansion | Petco
winning with digital a year sales stack growth high growth high value growth in channel customer retention in expanding categories enhanced profitability focus providing an unparalleled customer experience sourcing leaders from top tech and retailers executing against unique capabilities toy pet health ecosystem disruptive innovation top talent recurring revenue a | Petco
positioned to meet customer preferences in store digital i ail me ait the health wellness sec be a ate if a a i of a | Petco
how our digital business is the ultimate enabler digital veterinary services service bookings ean i connecting degree health mission to manage your pet health enabled by robust digitally integrated data insights recommendations know abut loyalty care | Petco
how our digital business is the ultimate enabler digital services grooming location change suit avenue west appointment for appointments for vet care grooming training more stylist pond customer integration driving new growth acquisitions bath res stylist time grooming service change | Petco
how our digital business is the ultimate enabler digital customer experience get it your way con which dog butters add another dog continue simple shopping right food finder expert partners ship from store unique delivery options with | Petco
how our digital business is the ultimate enabler digital pet profiles recommendations home dog dog collars leashes harnesses dog leashes patterned dog leashes reddy rope dog leash reddy reviews answered questions pick up and save delivery to free same day delivery on available today at off when you buy pick in store personalized profile shop of users create a profile care reminders and order within hours mins get it tomorrow filet mignon new york strip flavor blue buffalo blue life protection delights free shipping on was get it wed mar add to cart i | Petco
how our digital business is the ultimate enabler digital vital care pals nutrition perks your store delivering to home dog dog food dry dog food wholehearted grain free all life stages salmon and pea recipe dry dog food wholehearted reviews answered questions i rater off your first repeat delivery reg repeat delivery select in learn more grain free interest free payments of free shipping on get it tue mar not available at unleashed by order within hours mins get it today free same day delivery on delivery to pick up and save tap to zoom lai | Petco
industry leading unlocking the highest value customers more spend than non users peanut edit reminders products he peanut whole health check margin than non users lock ups are illustrations only and subject to change weekly active user growth action needed last purchased flea and tick buy again dismiss a | Petco
creating structural advantages capabilities less cost when shipped through areas where we meet areas where we beat competitive pricing same day delivery assortment services choose same day or when available repeat delivery vital care | Petco
focus on continuous profitability improvement against multiple business levers merchandising optimization haem a pick up in store same day reduce with inventory grow owned brands invest in site merchandising improvements enhance personalization grow buy now pay later adoption grow vendors and expand placements of advertising spend future outlook shipping cost | Petco
retail building world class digital customer experience leveraging structural advantages delivering profitability enhancements new customer acquisition improved capturing share of wallet | Petco
pet care | Petco
strong track record of results consecutive quarters positive growth new customers over a two year span revenue per labor hour two year growth task labor owned brands two year growth pet care center fulfillment | Petco
summit a emu | Petco
unlocking the soul of our culture learning hours tech investment empowering partners to enhance pet parent experiences intent selling training business intelligence investments in analytics partners offering whole health solutions investments highly trained partners engaging directing guests growth investments in new hardware for strategic | Petco
improving our fundamentals focused metrics hub market hub hub district hub hub store hub territory hub i national east tun organics outdated it of contents | Petco
key customer service metrics key customer service metrics delighting guests who trust our partners for great advice outperforms the industry average partner friendliness partner knowledge partner helpfulness | Petco
retail world class pet health wellness anyway you need it pet care centers partners services opportunities | Petco
pet care center evolution delivering productivity in a highly scalable model growing driven by strategy and enhanced partner sales cultures average annual revenue per location confidential oer services wellness owned vet premium merch services wellness services wellness vital future state mele we do a average across all stores vet a stores have owned vet widely distributed merch widely distributed merch widely distributed merch destination vital premium merch premium merch | Petco
pet specialty is in small town markets small market tam opportunity a i spec men i i | Petco
neighborhood farm pet supply test in multiple southern states open validate scale ide freestanding store a prime retail node featuring garage and yard customer experiences one stop shop for all your and livestock needs with a community feel enabled with differentiated services such as vet clinics mobile grooming and self wash stations and feed with high quality foods supplies brands and companion animal assortment | Petco
ace colorado colorado stop on excellent adventure | Petco
flipping the company upside down the more we listened and removed obstacles the better we performed we work for our pet care center partners just got this it was an epic way to find out congratulations that is so awesome very well deserved sig registration information | Petco
we are a purpose driven company we have passionate partners we are adventure i aes stop on excellent ere | Petco
creating value loyalty membership investor day | Petco
loyalty and membership ecosystem pals rewards perks vital care customers members subscriptions basic point products comprehensive pet health paid grooming nutrition buy get free experience free to all customers gold standard experience end of | Petco
pet budget ase health care of parents prefer a one stop experience | Petco
what is vital care revolutionary program unlocks the best of whole health offerings pet budget makes it easier and more affordable for you to for your pet all in one place unlock with wellness plan that pays for itself at per month just makes sense unlimited routine vet exams pals rewards for every routine exam at vet your choice or unlimited routine exams at participating vet locations find an eligible veterinarian a pals rewards every month off all nutrition wellness any brand dry wet fresh or frozen off every groom repeat delivery savings extra off nutrition when you sign up for repeat delivery | Petco
vital care is good for maximizing share of wallet spend to average dog customer increase in spend and trips over period new to services new to | Petco
and it good for pets new to quality nutrition groom visit after signing up vital care chief veterinarian vital care makes easy to ensure you are keeping up with your pet vet grooming nutrition needs all of which are critical to a healthy life vet visit after signing up vital care aye | Petco
massive customer base to convert to paid members activating vital care through pet care centers digital outbound marketing smart reminders launched in | Petco
accelerating vital care vital care future members revenue expansion to cat repeat delivery integration affiliate program subscription expansion to companion animal personalization and enhanced experience pals rewards | Petco
customer investor day | Petco
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cutting edge customer marketing engine media driven revenue yoy degree data platform adaptive algorithms acquisition monetization retention hoy industry average data orchestration guide a precision | Petco
right customers right customers right message precision marketing right time right place solution focused comprehensive health wellness pet needs real personalized recommendations for individual reaching where and how they consume information | Petco
health conscious pet parents higher than average spend is worth it believe it is important to consider their emotions mental health take their pets for regular check ups not sick willing to pay whatever it takes to feed their pets healthy food believe paying more for premium brand products category spend | Petco
right customers right message right message precision marketing right time right place targeting the highest value real personalized recommendations for individual pet needs how they consume information reaching where and | Petco
go beyond the basics of pet parenting and join revolution for whole health social accessible bay an home | Petco
las van wellness | Petco
menu a search don miss enter small agency awards skeptical of virtual land watch the commercials enter age leading women a list awards winners the best ads of in a year of uncertainty these are the commercials and brand moves that stood out from the pack in by ann and parker published on it what we want if we were pets agency made a brave and interesting move in it became a health fun campaign out of that imagined pets as people discussing and wellness company for pets to announce that shift it debuted a also scented lead dogs to new store campaign illustrated the retailer new brand direction a later spot focused on the mental health of pets as their owners went back to humans at a snobby cocktail party to their animal counterparts the the company range of services as well as cleverly matching the read highlights mental health of pets the office | Petco
as group naturally fresh a wild one world best cat litter honest kitchen taste of the wild wellness vendor investment mars a a solid gold ology | Petco
the health wellness | Petco
| Petco
right customers right message precision marketing right time right place right place targeting the highest value solution focused comprehensive health wellness pet needs real personalized recommendations for individual reaching where and how they consume information | Petco
video channels social networks search episode watching shark tank selling sunset episode celebrity family feud | Petco
millions he awareness new customers added in total active customers | Petco
nutrition litter pest grooming training vet vital care vital care the health wellness and points to your next pals reward i welcome to the family likelihood to engage pet budget is the easiest and most affordable way to for your pet whole health in one place join now a a a fine benefits unlock the best of with the wellness plan that pays for itself at per month just makes sense for every we look forward to being the health wellness partner for your here unlimited routine exams pals rewards pals rewards every month of your off all off with plus off full service physical health top of health dog extra all a | Petco
personalization is our future millions of possible variations a a a i a a a a a a a i a a a i a a | Petco
right customers right message precision marketing right time right time right place targeting the highest value solution focused comprehensive health wellness how they consume information reaching where and | Petco
a new era of pet with personalized care dashboard monthly whole health report at health and wellness needs physical reminders grooming | Petco
life stage transition pest season how to help move into adulthood pest threat alert get ahead of fleas ticks use our weather tool to discover the pest threat level in your area and how to prevent infestations get started by entering your city state or zip code while may still look and behave like a puppy dogs may be considered adults as early as months of age depending on the breed as they move into adulthood their needs change here a helpful to help make the transition easier tips for your dog physical health | Petco
capturing hearts and minds of pet parents yoy cross category customers just me that satchel mental health matters about my dog just want members our society government to care as much about our fellow humans as cares | Petco
the health wellness a field day live shopping fest am ree a field day | Petco
the health wellness | Petco
guidance investor day | Petco
gaining share pet health wellness leader executing on our commitments sustainable runway for growth revenue executing through supply chain dynamics total active customers revenue growth eye capital expenditures in margin growth planned vet hospital cost out initiatives sales | Petco
revenue growth translated to strong adjusted performance key highlights net net grew versus the prior year with accelerating trends male trends and expense leverage drove while we meaningfully invested in reconciliation at the end of this presentation partners through increased hourly pay higher bonuses and other benefits continued scaling of vet hospitals enhanced and data analytics capabilities non financial measure see definition and | Petco
reaffirming guidance net revenue nace nims capital expenditures other factors that are beyond control undertakes no obligation to update its strong top line growth and operating leverage is expected to translate to strong bottom line growth is not possible to do so without unreasonable efforts due to the uncertainty and potential variability of reconciling items which are dependent on future events and often outside of management control and which could be significant because such items cannot be reasonably predicted with the level of precision required we are unable to provide outlook for the comparable measures forward looking estimates of adjusted and adjusted are made manner consistent with the relevant definitions and assumptions noted herein as of march all is subject to change without notice depending on a number of factors including economic conditions currency rates the tax and regulatory landscape and we have not reconciled adjusted and adjusted outlook to the most comparable outlook because it | Petco
financial priorities to drive sustainable shareholder returns above market top line growth continued execution driving operating leverage strengthening balance sheet by accelerating debt reduction growth disciplined capital allocation with a focus on organic | Petco
long term financial framework faster than revenue an eye a growth net income net leverage ratio | Petco
proven ability to grow above category and gain share through wallet expansion growth revenue growth revenue customer of ona of growth of indexed average customer repeat a ails a growth growth of growth mobile user of growth at current market at current rate of growth food grooming perks growth growth a | Petco
delivering above market top line growth continued expansion rapidly expand services offering led by national vet footprint deepen competitive moats through differentiated merchandise connected data to drive more share of wallet from more customers relentless execution high single digit revenue | Petco
driving operating leverage and growth revenue faster an | Petco
focused on operational excellence cost efficiencies program driven cost discipline million end to end approach to enable savings for investment and leverage customer service procurement spend management effectiveness pricing optimization organization design location supply chain cogs and vendor partnerships | Petco
disciplined capital allocation with a focus on organic growth near term priority priorities approach priorities approach reinvest in the core business for reinvest in the core business for organically share repurchases dividends to shareholders achieve leverage ratio by inorganic debt repayments strategic tuck in leverage ratio strategic tuck in maintain or less debt repayments inorganic | Petco
investing drive growth priority projected annual spend investment areas core invest vet pet care centers supply chain digital innovate committed to achieving well above hurdle rate returns rural vital care | Petco
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